Growth stocks are those that are expected to grow faster than the market as a whole. As a result, "growth companies" are in the early stages of their business cycle and are expected to grow revenue faster than the market average. Investors typically purchase growth stocks with the expectation of rising share prices as the company expands.
A value stock is the inverse of a growth stock in that it is a company at a later stage of its growth cycle whose stock is trading at a lower price. The primary distinction between growth and value is the market's expectation of future growth and the price they will pay for it. Value stocks do not have high expectations, whereas growth stocks do. Whether one stock outperforms another is generally determined by whether the company meets or exceeds growth expectations.

A growth stock refers to shares of a company that is expected to experience substantial, above-average growth in its revenue, earnings, and overall market value compared to other companies in the market. Investors are attracted to growth stocks for their potential to deliver significant capital appreciation over time. These companies typically reinvest their earnings into expanding operations, launching new products, or entering new markets rather than distributing dividends to shareholders.

Characteristics of growth stocks often include a high price-to-earnings (P/E) ratio, reflecting the market's anticipation of future earnings growth. Investors are willing to pay a premium for these stocks, betting on the company's ability to sustain rapid growth. Technology and innovation-driven sectors often feature prominent growth stocks, as they are at the forefront of industry advancements. However, it's important to note that investing in growth stocks also comes with higher risk due to the uncertainty associated with future growth projections.